SALES SUPPORT AGREEMENT
Between
THE PENN INSURANCE AND ANNUITY
And
XXXXXX, XXXXXXXX & XXXX, INC.
Individual Variable and Fixed Annuity Contracts
Dated as of March 1, 1995
AGREEMENT made as of the 1st day of March, 1995, by and between THE
PENN INSURANCE AND ANNUITY COMPANY ("PIA"), a Delaware Corporation, and XXXXXX,
XXXXXXXX & XXXX, INC. ("HTK"), a Pennsylvania Corporation.
W I T N E S S E D:
WHEREAS, PIA is engaged in the business of issuing individual variable
and fixed annuity contracts to the public;
WHEREAS, HTK is licensed as a life insurance agent of PIA under state
insurance laws, is registered as a broker-dealer under the Securities Exchange
Act of 1934 and is a member of the National Association of Security Dealers,
Inc. ("NASD"); and
WHEREAS, PIA desires that HTK provide sales support services in
connection with the sale of individual variable and fixed annuity contracts by
designated life insurance agents of PIA, and HTK desires to provide such
services;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. PIA will furnish HTK with the names of its life insurance
agents who indicate a desire to sell individual variable and
fixed annuity contracts identified in Schedule I attached
hereto (hereinafter referred to as the "Contracts").
2. HTK, after investigation will select the life insurance agents
of PIA who are to become qualified under federal securities
laws and rules of the NASD to engage in the sale of Contracts
and will use its best efforts to cause such life insurance
agents to be qualified. Life insurance agents so qualified
will be "persons associated with" HTK under the Securities
Exchange Act of 1934 and the applicable rules of the NASD.
Upon such qualification of a life insurance agent, the
qualification shall be certified in writing to PIA by HTK.
3. Prior to permitting a life insurance agent to sell Contracts
as an associated person of HTK, PIA, HTK and the life
insurance agent will enter into an agreement pursuant to which
the life insurance agent will acknowledge that he or she will
be an associated person of HTK in connection with his or
selling Contracts and that the life insurance agent's right to
continue to sell Contracts is subject to his or her continued
compliance with such agreement and the rules and procedures
established by HTK.
4. It is contemplated that other personnel of PIA may become
qualified as associated persons of HTK in order to carry out
securities activities with respect to the sale of Contracts.
HTK will train such personnel as requested by PIA, and will
use its best efforts to cause such personnel to become
qualified as associated persons. Upon such qualification, the
qualification shall be certified in writing to PIA by HTK.
5. HTK will fully comply with the requirements of NASD and of the
Securities Exchange Act of 1934 and will supervise diligently
the security activities of life insurance agents of PIA who
are associated persons of HTK. Upon request by HTK, PIA will
furnish or request any life insurance agent who is an
associated person to furnish (at PIA's or the life insurance
agent's expense) such appropriate records that may be
necessary to insure diligent supervision.
6. In the event any associated person fails or refuses to submit
to supervision by HTK in accordance with this Agreement, or
otherwise fails to meet the rules and standards imposed by HTK
on the associated person, HTK shall certify such fact to HTK
and shall immediately notify the associated person that he or
she is no longer authorized to engage in securities activities
with respect to the sale of Contracts, and HTK and PIA shall
take whatever additional action may be necessary to terminate
such securities activities of the associated person.
7. HTK will assume full responsibility for the security
activities of its associated persons with respect to the sale
of Contracts and for initial and continued compliance by
itself and its associated persons with applicable federal and
state security laws and rules of the NASD. HTK may demand and
shall be entitled to receive such assurances from PIA as HTK
deems appropriate to demonstrate compliance with the
Securities Act of 1933 and the Investment Company Act of 1940.
8. Compensation and reimbursement of expenses payable to life
insurance agents in connection with sales of Contracts shall
be paid by PIA under PIA's agency contracts and will not be an
expense of HTK. All premium payments paid under Contracts by
owners shall be paid to PIA and will not be income to HTK. HTK
shall have no interest in any commissions or other remunerate
payable to life insurance agents by PIA or in any premium
payments paid under Contracts to PIA. For regulatory purposes
of the NASD and the Securities Exchange Act of 1934,
commissions paid by Penn Mutual shall be appropriately
reflected in the books and records maintained by or on behalf
of HTK.
9. At the request of HTK, some or all of the books and records
required to be maintained by a registered broker-dealer under
the Securities Exchange Act of 1934 in connection with the
sale of Contracts will be maintained by PIA as agent for HTK.
PIA agrees that such records are and shall remain the property
of HTK, will be maintained and preserved in conformity with
the requirements of Rules 17a-3 and 17a-4 under the Securities
Exchange Act of 1934, to the extent that such requirements are
applicable to the Contracts, and will be subject to
examination by the Securities Exchange Commission in
accordance with Section 17(a) of the Securities Exchange Act
of 1934.
10. A confirmation with respect to each purchase payment made
under Contracts will be sent to the owner of such Contract in
accordance with Rule 10b-10 under the Securities Exchange Act
of 1934.
11. In payment for the services performed under this Agreement,
PIA shall compensate as provided in Schedule I attached
hereto.
12. The compensation for services provided under this Agreement
shall be paid within 15 days after the end of the calendar
month in which premium payments are accepted by PIA. Should
PIA for any reason return a premium payment, HTK shall repay
PIA the total amount of any compensation which PIA may have
paid to HTK with respect to such premium payments.
13. HTK will cooperate with PIA in investigating and settling all
claims that are made against PIA in connection with the sale
of Contracts by life insurance agents of PIA who are
associated with HTK. HTK shall promptly forward to PIA any
notice of claim or relevant information concerning a potential
claim which may come into its possession, and shall promptly
forward to PIA any legal papers served on HTK involving the
sale of Contracts.
14. HTK will indemnify and hold harmless PIA and each director and
officer of PIA against any losses, damages or liabilities,
insofar as such losses, damages and liabilities arise out of
or are based upon the failure of HTK and its officers,
employees and representatives to comply with the provisions of
this Agreement.
15. PIA will indemnify and hold harmless HTK and each director and
officer of HTK against any losses, damages or liabilities, to
which HTK or such director or officer becomes subject, under
the Securities Act of 1933 or otherwise, insofar as such
losses, damages and liabilities arise out of or are based upon
any inaccurate or inadequate statement in the Registration
Statement for the Contracts.
16. This Agreement shall continue in effect until terminated.
Either party may terminate the Agreement by giving the other
party thirty days prior written notice.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year written
above.
THE PENN INSURANCE AND ANNUITY
COMPANY
Attest
By
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X. Xxxxxxxx Illoway
Vice President
XXXXXX XXXXXXXX & XXXX, INC.
Attest
By
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Xxxxxxx X. Cloud
President
